All Forum Posts by: Matt Szablowski

Hi I’m a new investor that is a new Phoenix resident since January. I’m a travel nurse and would like to house hack my first investment property. Im looking for a 3-4 bed 2 bath home by furnishing and renting out each individual room. I’m seeking advice on what locations would be best to house hack and also would like to know what other investors experience has been like house hacking in the Phoenix area.

My price point is 400k or less and must include a pool. I'm open to a condo or townhome but I think a house would be best to avoid any hassle from HOA. I'm looking to be close to the middle of Phoenix so I'm close to as many near hospitals as possible. Based on what I'm looking for I think North Glendale and parts of North Phoenix are best suited for me. My plan is to hold the property and make cosmetic improvements so I could 1031 exchange it in the future. I would love to hear from anyone that's currently investing in those areas. What neighborhoods would you recommend and what areas to stay away from. Thank you in advance for any advice, I really appreciate it.

Quote from @Henry Lazerow:

Client is from BiggerPockets but wanted to keep name private. Happy to share a bit of what they did though and the process to hopefully help others looking to do BRRR's/House Hack.

Property: 3 unit bought off MLS for $590k using a 10% down loan option through a local credit union. After credits the loan ammount was for $531,000. Bought Nov 2020. Oddly the property had been sitting for months and was just very dated inside with low rents ($1200 for 2br units in that neighborhood, crazy right?). Had no major issues, we weren't sure why no one else had bought it but the numbers were great using market rents in our anaylsis so moved forward.

New appraisal: $875,000 which allowed client to have new mortgage up to $656,000 so fully covered cashing out the down payment/rehab expenses. I put together a sheet with highest comparable sales in area which helped appraiser get to our target. There were many comps even higher so we potentially could of gone higher but didn't need to. 

Rehab: The rehab was very light mainly cosmetics. Cabinets, refinishing floors, paint, tile, etc. No moving walls, adding bathrooms, etc. kept it simple. Exact cost: Confidential in case decide to flip.

Strategies: I see a lot of people on BP thinking they need to do a gut or major rehab to do a BRRR. I always tell people to keep it simple KISS haha. The bigger the rehab the more things that can go wrong. You can get pretty close to top level rents by doing cosmetics... white quartz in kitchen, $1200 white shakur cabinets from lowes, $200 of white tile, refinish old wood flooring a dark color, new $300 bathroom vanity w/white tile and new paint throughout. By keeping the rehab budget low it makes it a lot easier to have enough margin left for the cash out vs doing six figure major rehabs. I like the class A/B neighborhoods as it is easier to create enough equity for BRRR to work.

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 Hi Henry, 

Thank you for sharing this information from a few years ago. I'm currently looking at a 3 unit in Roscoe Village as well and see a lot similarities to the property you posted. Are you able to share what credit union you used for the purchase of this property and also what is the current for each of those units? Any information is appreciated. Thank you!

 Hi @Michael Wallimann , thank you for your advice. I think you are right and decided not to pursue the property. I will continue my search and try to save money in the meantime. Thank you!

Thank you Eudith! I appreciate your recommendations! I don't know much about 203k loan and should do some more research. The 3-4 unit homes I've looked at haven't been passing the self sufficiency test of the FHA loan so I've been mostly looking at Duplexes which self sufficiency doesn't apply to. Perhaps I need to scale down and look at cheaper markets where it might be easier to find a self sufficient 3-4 unit with a higher down payment.

 Hi Moody, 

It's normal to have negative cash flow in a duplex while you live there but you should have at least a small cash flow once you move out and rent all units. It's reasonable to be worried about home built 100+ years ago but like others have mentioned that's what you need good inspector for, if the home was well maintained by the owners it could still be in good shape for years to come. If you are still worried I would recommend looking strictly for homes built in the 1950s or later. I wish you good luck with your search for your first REI!

Hi BP friends,

What are your thoughts about buying a MFU house hack that initially has negative cash flow once it is occupied by tenants as long as I see possibly for cash flow in the future with refinancing for lower interest rate and completing updates that would lead to higher rent.

Background: I'm currently looking for my first house hack (and first investment) in the Chicago area with a FHA loan and 3.5% down payment. I've been searching in Jefferson Park, Albany Park, Irving Park, Portage Park, Avondale, Pilsen and University Village. Most of the properties I looked at are between my price range of $400k-$500k I believe I have found a few good duplexes that meet FHA guidelines, have strong bones and opportunity for sweat equity that will help me raise rent in the future. However, due to the high interest rates and low market rent costs these properties would either (best case scenario) break even or potentially have negative cash flow of $300-$500 dollars per month when they are fully occupied with year long tenants. When negotiating I plan to negotiate a buy down interest rate or price of home but realistically it will still not cash flow initially.

Strategy: I would hold this property and refinance in the future once I have 20%> equity and interest rates are lower. There's also opportunity for sweat equity to improve the out of date kitchen's, bathrooms and living room  but financially I won't be able to complete the updates all at once. With the updated units I would raise the rent. In the meantime I can try renting one unit as a medium term rental to help create cash flow or potentially live in it for longer if needed while the other unit has a year long tenant. Once both units are completely updated, with higher rent and interest rates are 4% or lower each unit could cash flow $300 per month. 

Is this a bad strategy for a small return? I understand that it's a risk because interest rates could potentially stay high for a long time and it wouldn't make sense to refi but this would be my first mortgage and investment property so I feel like I can take on the risk in this time when it's hard to find a good investment deal.

I would like  stay close to Chicago for now. I also want to buy now rather then wait another 6 months so I can start building equity and avoid competition. 

Thank you for any advice or input. 

Hi, I’m a new RE investor in search of a home that I can rent out as a furnished MTR  month to month.
I would like to know if any property managers or experienced investors have recommendations on where I could find Condos with HOA that would allow month to month furnished rentals. Im aware that this is difficult to find but perhaps some neighborhoods have less strict HOA. My budget is about 400k so I don't think I'd be able buy a MFU or a house unless it's in need of a heavy rehab or is in a D class neighborhood.

I’m looking for a neighborhood that is C class or better and has a handful of hospitals nearby as my target tenants will be travel nurses. Thank you! 

I'm also a travel nurse and have thought about a similar scenario. My dilemma is that if you are doing a owner occupied loan and make the investment property your primary residence don't you then lose your stipend money as a travel nurse since you ar Eno longer away from your primary residence?